Williams-Sonoma (WSM) Tops Q2 EPS by 3c, Revenues Beat, Comp. Sales Up 6.5%; Raises FY19 EPS/Revenue Guidance, Boosts Long-Term Financial Targets

August 28, 2019 4:20 PM EDT

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Williams-Sonoma (NYSE: WSM) reported Q2 EPS of $0.87, $0.03 better than the analyst estimate of $0.84. Revenue for the quarter came in at $1.37 billion versus the consensus estimate of $1.32 billion.

SECOND QUARTER 2019

  • Net revenue growth of 7.5% to $1.371 billion
  • Comparable brand revenue growth of 6.5%, primarily driven by an acceleration in comparable growth for West Elm and Pottery Barn to 17.5% and 4.2%, respectively
  • GAAP operating margin of 6.3%; non-GAAP operating margin expansion of 10bps to 6.9%
  • GAAP diluted EPS of $0.79; non-GAAP diluted EPS $0.87, a 13% increase compared to Q2 18

GUIDANCE

  • Raises fiscal year 2019 net revenues, comparable brand revenue growth and EPS guidance
  • Reiterates long-term financial targets

Laura Alber, President and Chief Executive Officer, commented, “We continue to deliver very strong results. In the second quarter, comp revenue growth accelerated to 6.5%, while operating margin expanded and EPS grew double digits. The growth strategy that we outlined at the beginning of the year is driving results and giving us the competitive advantage to continue to outperform. West Elm, our biggest growth opportunity, continues to accelerate, the Pottery Barn brands have returned to strength, and our cross-brand initiatives such as The Key and Business-to-Business are becoming more impactful levers of growth. We are also improving the customer experience through innovation and experimentation, and we are seeing the results of this work fuel brand level performance across our portfolio. In addition, our data-driven performance marketing is producing outsized returns on our digital media investments."

Alber continued, “Our performance year-to-date demonstrates that our initiatives are successfully driving consistent profitable growth across the business and we are confident that we will build on our market share gains in the second half and longer-term. As a result, we are raising our full-year guidance for net revenues, comp revenue growth and EPS.”

GUIDANCE:

Williams-Sonoma sees FY2019 EPS of $4.60-$4.80, versus the consensus of $4.69. Williams-Sonoma sees FY2019 revenue of $5.74-5.9 billion, versus the consensus of $5.77 billion.

  • Total Net Revenues: $5.740 billion - $5.900 billion
  • Comparable Brand Revenue Growth: 3% - 6%
  • Non-GAAP Operating Margin: In-line with FY 18
  • Non-GAAP Diluted EPS: $4.60 - $4.80
  • Non-GAAP Income Tax Rate: 23% - 24%
  • Depreciation and Amortization: $185 million - $195 million
  • Net 25 store closures for a total store count of 600 by the end of FY 19
  • Capital Spending: $200 million - $220 million
  • Return to Shareholders: quarterly cash dividend of $0.48 per share and continued share buybacks under our multi-year share repurchase authorization of approximately $640 million

For earnings history and earnings-related data on Williams-Sonoma (WSM) click here.



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